Validator

Overview

Validators play a pivotal role in the sendme system. They guarantee the integrity of the parties who act within the system. Validators use off-chain technologies and may use various approaches and methodologies to verify KYC, AML, and other regulatory and compliance models. This verification is an ongoing process, not a one-time event. This enables a secure, transparent, and compliant environment for DC transactions, fostering trust and empowering various entities to participate responsibly within the financial ecosystem.

Functions that Validators are eligible to perform within the system are defined by the set of Properties they possess. These Properties are not mutually exclusive, and Validators may possess more than one.

Let's explore the list of functions in detail:

Function:

• Compliance Verification:

  • In order to verify the identities and adherence to relevant policies, Validators utilize diverse methods like KYC, KYB, accreditation checks, regulatory compliance checks, etc.

• Properties Issuing:

  • Upon successful verification, Validators issue unique and non-fungible tokens (NFTs) called 'Properties' to individuals or entities. A Property stores vital information about the verified entity, including eligibility and permissions based on their specific details.

• Ongoing Monitoring:

  • Validators are responsible for continuously monitoring participants they have previously verified. This may include:

    • Tracking changes in profiles, reputation, and regulatory status.

    • Utilizing sanctions lists and anti-money laundering (AML) tools.

    • Re-verifying identities regularly or when triggered by specific events.

• Properties Revocation:

  • If a participant is compromised, engages in illegal activity, or appears on a sanctions list, the Validator who issued their Property must revoke and thus effectively terminate the associated permissions and access to the system.

• Reporting:

  • Validators may be obligated to report suspicious activity to designated authorities in accordance with relevant regulations.

• Voting:

  • Existing Validators may elect new members through a secure voting mechanism.

Relationship with Compliance Processor

• The Compliance Processor enforces policies that rely on the Properties managed by Validators.

Validator Appointment Approaches

There are two ways the Validator role may be assigned to a participant within the Protocol:

• Centralized Approach:

  • An Issuer may assign Validator roles based on pre-defined criteria and ongoing performance, similar to how Governments or Regulatory Bodies may issue a license to a bank or a company.

• Decentralized Approach:

  • A network of existing Validators may elect new members through a secure voting mechanism. This approach empowers the community to participate in system governance.